Bitcoin & Cryptocurrency in Albania

Bitcoin & Cryptocurrency in Albania

The Albanian government says it is mulling a regulatory framework on cryptocurrencies in a bid to diversify investment opportunities in the country in an innovative sector that creates well-paid jobs and apparently become a hub for such investment in a Western Balkan region that still remains skeptical to digital currency.

Prime Minister Edi Rama says cryptocurrency, also known as virtual or digital money, can create a lot of opportunities even in a developing economy such as Albania which he says can become a hub for potential investors targeting to get involved in this revolution of global finances.

The legal initiative comes at a time when the country’s key financial watchdogs, Albania’s central bank and the financial supervisory authority, have been repeatedly warning potential investors over the past couple of years of a series of risks related to investing in digital currency, the same as most regional countries.

Bitcoin, the primary cryptocurrency, is now trading at around $6,500 after surging to $20,000 in late December 2017, in a 20-fold hike for the year, leading to bankers, mainstream media and pundits to call Bitcoin a bubble.

“As part of our effort to open up new markets and create new opportunities for well-paid jobs and qualified people… we are exploring the possibility of setting up a regulatory framework on cryptocurrency which is a shocking novelty nowadays and where the opportunity to be innovative and set up a center of gravity for innovative financial markets is open for every country despite their level of development,” says Prime Minister Edi Rama.

“For the moment, we are assessing and working on the drafting of a regulatory framework after having conducted a thorough analysis and study. If the results are satisfactory, then we will promote even outside Albania, the country’s willingness to become a hub for numerous potential investors that target getting involved in this revolution of global finances,” Rama said last weekend, speaking at a ceremony on the launch of the Albania-Italy offshore section of the major Trans Adriatic Pipeline bringing Caspian gas to Europe.

Bitcoin and other virtual currency is already legal in several countries around the world, with the U.S., Canada, Germany, Denmark, Japan and South Korea rated among the top Bitcoin-friendly countries

Back in July 2017, when bitcoin rose $2,400, from almost zero in 2009 when it was launched, Albania’s central bank warned that while electronic money is a legally regulated and supervised activity even in Albania, the virtual currency is an activity completely out of the authorities’ watch and control.

The Bank of Albania says the activity of virtual currency operators is characterized by a considerable level of risk and insecurity, with no full guarantees on the customers’ protection from investment losses and involvement in any operation remains an action of individual responsibility.

The Albanian Financial Supervisory Authority has also informed investors that Albania has licensed no company to issue virtual currency.

“Of course there might be individuals or businesses in Albania investing online using the internet in companies which are issuing these initial coin offerings outside of Albania, but they should be aware that they carry all the risks and are responsible for their own choices when making such an investment,” Ervin Koçi, the head of Albania’s Financial Supervisory Authority told Tirana Times in an interview earlier this year.

The European Banking Authority has earlier warned that risks associated with buying, holding or trading virtual currencies include losing the money on unregulated exchange platforms which may go out of business, fail or be hacked by third parties. Virtual currency users are also unprotected when using it as a means of payment and its value can change quickly and even drop to zero.

The cryptocurrency initiative also comes as more and more Albanians have been studying information technology in the past few years despite the country still ranking poor on innovation capability and ability to retain talent.

New projects focused on digital literacy are also under way. Tirana’s iconic pyramid building, one of the communism era landmarks in the capital city, is soon set to become a youth multifunctional center focused on digital literacy.

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Vibrant future vs. scam

In a report examining the framework for the regulation of cryptocurrencies, Washington-based Coin Center research and advocacy center, says that tokens, including cryptocurrencies like Bitcoin, will likely have a profound effect on the future of the internet, financial technology, and governance systems in general.

“Perhaps the most exciting aspect of the technology is that it is entirely open for experimentation—there’s no patent or copyright to license, no university or corporation from which to seek a job, no exclusive membership fee to pay. Anyone with a computer and an Internet connection can develop and share their own currency, their own vision of the future,” says the report.

“The openness of this system makes it vibrant but it also can make it hazardous. Some new uses of the technology will be nothing more than scams garnished with the sort of techno-babble that inspires, confuses, and beleaguers the caution of naive investors who want to believe. The framework will hopefully enable regulators to more easily delineate between these inevitable scams and the legitimate innovations that will improve our lives, ensuring that a few bad oranges do not spoil the grove,” it adds.

Covert call centers acting as brokerage firms

While legal changes on cryptocurrencies are under way, Albania has already had troubled experience with covert call centers operating as brokerage firms, allegedly cheating investors in Albania and abroad.

Several unlicenced brokerage firms have disappeared without trace after defrauding investors or had their operations closed down after warnings by supervisory authorities in the past couple of years.

Last July, Albania launched a probe into dozens of call centers allegedly operating as covert unlicensed brokerage firms involved in fraud operations by offering potential investors attractive return rates for high-risk financial products at a time when interest rate from traditional investment instruments such as bank deposits are close to zero.

Albania’s Financial Supervisory said it asked for support by intelligence and money laundering prevention officers to investigate into the suspected companies which could turn into a national issue and mar the country’s image.

Financial authorities have issued several warnings about unlicensed operators involved in online forex or ‘binary option’ trading platform where the payoff is often either some fixed monetary amount or nothing at all. In some cases, local investors often not aware of the risk that such investments bear, are reported to have lost considerable amounts after being lured through aggressive marketing and high return rates.

While no statistics are available yet for the past couple of years, Albanians invested about $1 million in online trading in international stock exchanges in 2015 when several unlicensed operators emerged, triggering concern by the country’s highest financial authorities.http://www.tiranatimes.com/?p=138935

Albania to Explore Framework for Cryptocurrency RegulationsThe government of Albania has stated that it will be considering the creation of cryptocurrency regulations.

The eastern European nation hopes to encourage innovation, investment and, in turn, create jobs relating to the transformative financial technology by providing a welcoming base of operations for startups.

Albania Hoping to Lure Investors and Startups with Crypto RegulationAccording to a report in local news source The Tirana Times, the Prime Minister of Albania has stated that creating a regulatory framework could help establish the country as a hub for innovation in the rapidly evolving financial technology space.

Edi Rama spoke on the topic over the weekend during the launch ceremony of the Trans Adriatic Pipeline that will transport Caspian gas to Europe:“As part of our effort to open up new markets and create new opportunities for well-paid jobs and qualified people… we are exploring the possibility of setting up a regulatory framework on cryptocurrency which is a shocking novelty nowadays and where the opportunity to be innovative and set up a centre of gravity for innovative financial markets is open for every country despite their level of development.”

Rama went on to state that his government had already undertaken considerable research on the subject. Pending favourable results from the assessments completed, the country will begin to promote itself as a central hub for businesses dealing with cryptocurrencies.

Previously, Albania’s government and financial regulators have offered warnings to potential investors, but have not been forthcoming with specific rules relating to the space.

In July 2017, the central bank stated that virtual currencies existed outside the supervision of the authorities. The institution went on to say that investments were the responsibility of individuals, along with providing a reminder to the public that the Albanian Financial Supervisory Authority has issued no licences for companies creating and distributing virtual currencies. The head of Albania’s FSA spoke to The Tirana Times about the risks the space poses for investors earlier this year:

“Of course there might be individuals or businesses in Albania investing online using the internet in companies which are issuing these initial coin offerings outside of Albania, but they should be aware that they carry all the risks and are responsible for their own choices when making such an investment.”

In exploring the implications of digital asset regulation, Albania joins the likes of Malta, Gibraltar, and Switzerland. These jurisdictions, along with having much greater experience in attracting startups by using favourable regulations, all have something of a head start on Albania.

FIRST-MOVER ADVANTAGESWhile the kind of regulatory environment lawmakers hope to create remains sketchy, Albania’s plans put it ahead of the game locally, where progress on embracing and formalizing innovative markets remains slow. In the nearby EU, states continue to adopt a patchwork approach to cryptocurrency in particular. Spain, last week, announced it planned to force all citizens to disclose their holdings for tax purposes whether or not they still lived at home.

“For the moment, we are assessing and working on the drafting of a regulatory framework after having conducted a thorough analysis and study,” Rama had said previously. “If the results are satisfactory, then we will promote even outside Albania, the country’s willingness to become a hub for numerous potential investors that target getting involved in this revolution of global finances.” https://bitcoinist.com/albania-wants-to-create-shocking-novelty-cryptocurrency-regulation/